CITY OF LITCHFIELD V UNION CONSTRUCTION CO
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STATE OF MICHIGAN
COURT OF APPEALS
CITY OF LITCHFIELD,
UNPUBLISHED
October 17, 1997
Plaintiff-Appellant,
v
UNION CONSTRUCTION COMPANY and
ALAN E. RINGENBERG d/b/a RINGENBERG
ENGINEERING,
No. 189823
Hillsdale Circuit Court
LC No. 92-022554-CK
Defendants-Appellees.
Before: O’Connell, P.J., and Smolenski and T. G. Power*, JJ.
PER CURIAM.
Plaintiff City of Litchfield appeals as of right the trial court’s grant of summary
disposition in favor of defendants Union Construction Company and Alan E. Ringenberg, d/b/a
Ringenberg Engineering. We reverse and remand.
In 1983, plaintiff contracted with defendant Ringenberg, a licensed professional engineer,
for engineering, architectural, oversight and inspection services for the Simpson Drive project.
In 1984, plaintiff contracted with defendant Union for the construction of Simpson Drive. On
November 13, 1984, plaintiff accepted Simpson Drive as completed according to specifications.
Plaintiff has maintained throughout these proceedings that it did not learn until November 28,
1990, that Simpson Drive was not constructed according to specifications.
In September, 1992, plaintiff filed suit against defendants. Plaintiff’s subsequent
amended complaint contained one count alleging that defendants had breached their contracts
with plaintiff by failing to construct both the subsurface and bituminous surface of Simpson
Drive in accordance with contract specifications, and that, as a result, it had become necessary to
rebuild a major portion of the roadbed. The complaint also alleged that defendants had
fraudulently concealed the existence of the contract breaches from plaintiff by (1) failing to
disclose the breaches to plaintiff; (2) falsely representing that Simpson Drive was constructed to
specification, and; (3) covering the roadbed, which did not meet specifications, with what
appeared to be a proper bituminous surface.
* Circuit judge, sitting on the Court of Appeals by assignment.
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Defendants moved for summary disposition pursuant to MCR 2.116(C)(7) and (8).
Defendants contended, in relevant part, that plaintiff failed to state a claim for fraudulent
concealment and that plaintiff’s breach of contract claim was barred by the six-year statute of
limitations applicable to actions to recover damages for breach of contract. This statute provides,
in relevant part, as follows:
No person may bring or maintain any action to recover damages or sums
due for breach of contract, . . . unless, after the claim first accrued to himself or to
someone through whom he claims, he commences the action within the periods of
time prescribed by this section.
***
(8) The period of limitations is 6 years for all other actions to recover
damages or sums due for breach of contract. [MCL 600.5807(8); MSA
27A.5807(8).]
Plaintiff answered defendants’ motions, contending, in part, that its allegations
concerning fraudulent concealment were not intended as a separate cause of action but were
designed solely to permit it to bring its breach of contract claim within the two-year period
provided by the fraudulent concealment statute. This statute states as follows:
If a person who is or may be liable for any claim fraudulently conceals the
existence of the claim or the identity of any person who is liable for the claim
from the knowledge of the person entitled to sue on the claim, the action may be
commenced at any time within 2 years after the person who is entitled to bring the
action discovers, or should have discovered, the existence of the claim or the
identity of the person who is liable for the claim, although the action would
otherwise be barred by the period of limitations. [MCL 600.5855; MSA
27A.5855.]
In January, 1993, the court entered separate orders denying defendants’ motions for
summary disposition.
Defendants then answered plaintiff’s complaint and discovery
commenced.
Defendant Union subsequently moved for summary disposition on two grounds. First,
defendant Union contended that it was entitled to summary disposition pursuant to MCR
2.116(C)(7) on the ground that because plaintiff had not brought its claim within six years after
the time plaintiff accepted Simpson Drive, it therefore had no cause of action under the statute of
repose1 applicable to engineers and contractors. This statute provides, in relevant part, as
follows:
No person may maintain any action to recover damages for any injury to
property, real or personal, or for bodily injury or wrongful death, arising out of the
defective and unsafe condition of an improvement to real property . . . against any
state licensed architect or professional engineer performing or furnishing the
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design or supervision of construction of the improvement, or against any
contractor making the improvement, more than 6 years after the time of
occupancy of the completed improvement, use, or acceptance of the improvement,
or 1 year after the defect is discovered or should have been discovered, provided
that the defect constitutes the proximate cause of the injury or damage for which
the action is brought and is the result of gross negligence on the part of the
contractor or licensed architect or professional engineer.2 However, no such
action shall be maintained more than 10 years after the time of occupancy of the
completed improvement, use, or acceptance of the improvement. [MCL
600.5839(1); MSA 27A.5839(1).]3
Defendant Union further contended that because plaintiff had no cause of action, the fraudulent
concealment statute was inapplicable to this case.
Defendant Union alternatively contended that it was entitled to summary disposition
pursuant to MCR 2.116(C)(10) because, even if applicable, the fraudulent concealment statute
barred plaintiff’s claim because no issue of material fact existed that plaintiff discovered or
should have discovered the existence of the “alleged defect” more than two years before plaintiff
filed its complaint in September, 1992, where at least by June, 1990, plaintiff had contracted to
have Simpson Drive repaired or resurfaced due to settling in the road. Finally, defendant Union
contended that even if plaintiff filed suit within two years of discovering the existence of its
claim, no issue of material fact existed that defendant Union knew that Simpson Drive was not
constructed according to specification or that defendant Union engaged in any conduct
constituting fraudulent concealment of the breaches of contract. Defendant Ringenberg joined in
defendant Union’s motion.
In response, plaintiff acknowledged that it had not brought its claim within the six-year
period specified in § 5839(1), but contended that the fraudulent concealment statute nevertheless
applied to give it two years after it discovered the contract breaches in November, 1990, to bring
suit. Plaintiff also contended that, at the very least, questions of fact existed concerning whether
defendants fraudulently concealed the contract breaches.
Following oral argument, the trial court issued an opinion granting defendants’ motions
for summary disposition. Noting simply that § 5839(1) and the fraudulent concealment statute
were the “two statutes which the parties allege are applicable,” the trial court found that
plaintiff’s claim commenced on November 13, 1984, and expired six years later, before plaintiff
learned that Simpson Drive was not constructed according to specification on November 28,
1990. Relying on Smith v Quality Construction Co, 200 Mich App 283; 504 NW2d 24 (1993),4
the court concluded that plaintiff therefore had no cause of action because it had not filed suit
within the six-year period provided by § 5839(1). The court further concluded that the fraudulent
concealment statute “does not apply.”
On appeal, the parties again dispute the issue whether § 5839(1) precludes application of
the fraudulent concealment statute to this case. However, before addressing this issue, we
believe that we must first address the threshold question whether § 5839(1) applies at all to this
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case. MCR 7.216(A)(7); People ex rel Attorney General v Kosot Interplanetary, Inc, 37 Mich
App 447, 478; 195 NW2d 43 (1972).
This Court reviews a trial court’s decision on a motion for summary disposition de novo.
Pendzsu v Beazer East, Inc, 219 Mich App 405, 408; 557 NW2d 127 (1996). Although the trial
court did not specify the ground on which it based its grants of summary disposition, we assume
that the court granted the motions pursuant to MCR 2.116(C)(7) where it found that plaintiff had
no cause of action under § 5839(1) and that the fraudulent concealment statute was, therefore,
inapplicable. When this Court reviews a motion for summary disposition under MCR
2.116(C)(7), it accepts the allegations in a well-pleaded complaint as true and construes them in
the plaintiff’s favor. Kuebler v Equitable Life Assurance Society of the United States, 219 Mich
App 1, 5; 555 NW2d 496 (1996). The court must look to the pleadings, affidavits, or other
documentary evidence to determine whether there is a genuine issue of material fact. Guerra v
Garratt, 222 Mich App 285, 289; 564 NW2d 121 (1997). If there are no facts in dispute, the
question whether the claim is barred by the statute of limitations is one of law for the court.
Pendzsu, supra at 408. This Court reviews questions of law de novo. Kuebler, supra. However,
if a material factual dispute exists such that factual development could provide a basis for
recovery, summary disposition is inappropriate. Guerra, supra. The burden of establishing the
bar imposed by a statute of limitations is normally on the party asserting the defense. Kuebler,
supra.
It is well established that in ruling on a statute of limitations defense the court may look
behind the technical label that a plaintiff attaches to a cause of action to the substance of the
claim asserted. Local 1064, RWDSU AFL-CIO v Ernst & Young, 449 Mich 322, 327, n 10; 535
NW2d 187 (1995). In determining whether an action is of a type subject to a particular statute of
limitations, we look at the basis of the plaintiff’s allegations. Aldred v O’Hara-Bruce, 184 Mich
App 488, 490; 458 NW2d 671 (1990). The type of interest harmed, rather than the label given
the claim, is the focal point in determining which limitation period controls. Brownell v Garber,
199 Mich App 519, 526; 503 NW2d 81 (1993). The gravaman of an action is determined by
reading the claim as a whole. Aldred, supra at 490.
In Huhtala v Travelers Ins Co, 401 Mich 118; 257 NW2d 640 (1977), our Supreme Court
established a distinction for determining whether a claim is subject to the six-year statute of
limitations applicable to actions to recover damages for breach of contract or to the three-year
statute of limitations applicable to actions to recover damages for injuries to person or property
contained in MCL 600.5805(7); MSA 27A.5805(7), redesignated as MCL 600.5805(8); MSA
27A.5805(8) by 1978 PA 495. Id. at 125-126. Specifically, where the nature and origin of an
action to recover damages for injury to property is a promise or duty imposed by law, the threeyear period applies, even if the claim is premised on a contract theory. Id. at 126-130; see also
Lear v Brighton Twp, 184 Mich App 605, 607-608; 459 NW2d 26 (1990). Conversely, where
the nature and origin of a claim is the breach of an express promise and dependent on the
existence of a contract or contract principles, then the breach of that promise is not a damage to
property within the meaning of the three-year statute and the six-year statute applicable to actions
to recover damages for breach of contract applies. Huhtala, supra; Lear, supra. In Huhtala, the
Court held that the six-year statute applied to the plaintiff’s promissory estoppel claim because it
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was dependent on the existence of a contract or contract principles and its nature and origin was
not a duty implied by law but rather an express promise. Id. at 126, 130.
Section 5839(1) likewise applies to “any action” against an engineer or contractor “to
recover damages for any injury to property . . ., arising out of the defective and unsafe condition
of an improvement to real property” (emphasis supplied). Thus, in utilizing the distinction
enunciated in Huhtala, it would appear that § 5839(1) applies to a claim against an engineer or
contractor for a defect in an improvement to real property where, even if premised on a contract
theory, the nature and origin of the claim is a promise or duty imposed by law. However, again
utilizing Huhtala, it would further appear that § 5839(1) does not apply to a claim against an
engineer or contractor where the nature and origin of the claim is the breach of an express
promise and dependent on the existence of a contract. In Garden City Osteopathic Hosp v HBE
Corp, 55 F3d 1126 (CA 6, 1995), a diversity action governed by Michigan law, the Sixth Circuit
Court of Appeals expressly so held.
In Garden City, the plaintiff Michigan hospital contracted in 1970 with the defendant
contractor and the defendant architect for the construction of a building addition. Id. at 1128.
This contract included a specification that the defendant contractor
shall examine all surfaces that are to be plastered and report to the Architect if
these are found to be out of plumb, true or insecure, and shall be held strictly to a
straight job throughout. [Id. at 1129.]
The addition was apparently completed some time in the early 1970’s. See id.
In 1990, the plaintiff hospital contracted with a new contractor for the construction of
another addition. Id. In 1991, the new contractor discovered that a basement wall constructed
during the 1970 project had been built three inches out of plumb and that a coat of plaster had
apparently been applied to the wall so that it appeared straight. Id. In February, 1992, the
plaintiff hospital brought suit with respect to the 1970 contract against the defendant contractor
and the defendant architect. Id. The plaintiff hospital’s complaint contained five counts, the first
of which was labeled breach of contract, and also claimed that the defendants had concealed the
basement wall’s out-of-plumb condition by plastering the wall so that it appeared straight. Id.
The district court subsequently granted the defendants’ motion for summary disposition
on the ground that the plaintiff hospital’s claims were barred by § 5839(1). Id. The district court
did not consider the plaintiff hospital’s argument that it had two years after discovering its claim
to bring suit pursuant to the fraudulent concealment statute. The district court’s reasoning in this
regard was that § 5839(1) provided a six-year repose period and therefore the fraudulent
concealment statute was inapplicable because it authorizes commencing an action within two
years after discovery only if the action “would otherwise be barred by the period of limitations.”
Id. at 1129, 1134; see also MCL 600.5855; MSA 27A.5855
The Sixth Circuit Court of Appeals reversed and remanded. Id. at 1136. Although noting
that the parties had focused their dispute on how § 5839(1) applied, the court stated that the
threshold question was whether this statute applied at all to preclude the plaintiff hospital’s
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claims. Id. at 1130. The court surveyed Michigan case law and found that the distinction
outlined in Huhtala supplied the analysis for determining whether § 5839(1) applied to the
plaintiff hospital’s claims. Garden City, supra at 1131-1133. The court noted that the approach
taken in Huhtala was consistent with the language of various statutes of limitation, which apply
uniformly to actions to “recover damages,” but are distinguishable with respect to what the
damages are sought for, i.e., “breach of contract,5” “injuries to persons or property,6” or, as in
§5839(1) “injury to property, real or personal, or for bodily injury or wrongful death arising out
of the defective or unsafe condition of an improvement to real property . . . .” Garden City,
supra at 1133.
The court then applied the distinction outlined in Huhtala to the claim labeled breach of
contract and concluded that this claim was subject to the six-year statute of limitations applicable
to actions to recover damages for breach of contract. Garden City, supra. In arriving at this
conclusion, the Garden City court noted that the nature and origin of the claim was “that the
defendants failed to perform the express promise to construct the improvement in conformity
with the governing contract documents.” Id. The Garden City court also noted that the claim did
not involve a duty implied by law but rather was dependent on the existence of a contract and
contract principles. Id.
Although noting that the plaintiff hospital’s breach of contract claim was now barred by
the six-year statute of limitations because it had accrued sometime in 1971 when the defendants
constructed the wall,7 the Garden City court further held that
[b]ecause we have concluded that the “breach of contract” cause of action is
governed by section 600.5807(8), which provides a limitations period rather than
a repose period, summary judgment was inappropriate without considering the
fraudulent concealment argument. [Id. at 1134.]
The court remanded the case for further proceedings consistent with its opinion. Id. at
1136.
However, before we apply the distinction enunciated in Huhtala to this case, we believe
that we must first consider a previous opinion by this Court to determine whether a contrary rule
of law by which we are bound8 has been established. In Michigan Millers Mut Ins Co v West
Detroit Building Co, Inc, 196 Mich App 367; 494 NW2d 1 (1992), the defendant contractor built
a restaurant for the plaintiff owner that opened for business on July 1, 1980. Id. at 369. On April
24, 1988, the restaurant’s roof collapsed allegedly because of defective roof trusses. Id. The
plaintiff owner and plaintiff insurance company filed suit against the defendant contractor for
negligence and breach of contract. Id. The trial court subsequently granted the defendant
contractor’s motion for summary disposition pursuant to MCR 2.116(C)(7) on the ground that
the plaintiffs failed to bring suit within the time prescribed by § 5839(1). Id. at 370.
The plaintiffs appealed. Relying on previous caselaw, they argued that § 5839(1) was
inapplicable to claims seeking damages for deficiencies in an improvement to real property itself9
and that, therefore, the three-year period for injuries to persons or property found in MCL
600.5805(8); MSA 27A.5805(8) applied to their negligence claim, not § 5839(1). However, the
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plaintiffs acknowledged that their breach of contract claim was time-barred because it was filed
more than six years after it accrued. 10 Id. at 372, n 1.
The defendant contended that the previous cases relied on by the plaintiffs had been
effectively overruled by the Legislature’s subsequent addition of subsection (10) to § 5805:
(1) A person shall not bring or maintain an action to recover damages for
injuries to persons or property unless, after the claim first accrued to the plaintiff
or to some through whom the plaintiff claims, the action is commenced within the
periods of time prescribed by this section.
***
(10) The period of limitations for an action against a state licensed
architect, professional engineer . . . or contractor based on an improvement to real
property shall be as provided in 5839. [MCL 600.5805(1) and (10); MSA
27A.5805(1) and (10), as amended by 1988 PA 115.]
The defendants claimed that in adding § 5805(10) the Legislature intended to eliminate
any difference between third-party claims and claims made by owners against an engineer or
architect. Michigan Millers, supra at 372.
This Court affirmed the trial court’s grant of summary disposition. The Court agreed
with the defendant’s argument, holding as follows:
[W]e conclude that the Legislature’s intent in amending § 5805(10) . . .
was to apply the statute of limitation contained in § 5839(1) to all actions brought
against contractors on the basis of an improvement to real property, including
those brought by owners for damage to the improvement itself.
In arriving at its holding, this Court rejected the following argument by plaintiff:
Finally, plaintiffs’ argument that the Legislature’s intent in amending §
5805 was to include contract actions within the “prospective ambit” of § 5839(1)
is specious and inconsistent with their own arguments. According to plaintiffs, §
5839(1) is limited to tort actions and does not specifically include or exclude
contract actions from its coverage. Because § 5839(1) refers to “any action to
recover damages for any injury to property . . . or for bodily injury or wrongful
death,” it is clear that even before the addition of § 5805(10) it was not limited to
tort actions, but rather, included contract actions. If plaintiffs’ argument
concerning the intent of the addition of § 5805(10) were correct, the amendatory
language of that subsection would be rendered meaningless because the
applicability of § 5839(1) to contract actions was never in question and needed no
clarification. Moreover, plaintiffs’ argument in this regard is inconsistent with
their contention that § 5839 does not apply to actions brought by an owner against
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a contractor, because the only party who will have a breach of contract action
against a contractor is the owner. [Id.]
Thus, the question is raised whether Michigan Millers, which is binding on this Court,
precludes application of the distinction raised in Huhtala and applied persuasively in Garden
City to this case. We conclude that Michigan Millers does not compel such a conclusion.
In Michigan Millers, the issue facing this Court was whether Ҥ 5805(10) overrules this
Court’s interpretation of § 5839 in the cases mentioned above and requires an application of the
limitation periods specified in § 5839(1) to all actions against a contractor based on an
improvement to real property.” Id. at 372. However, this Court was called upon to decide this
issue in the context of the only theory advanced by the plaintiffs on appeal as not being barred
by § 5839(1), i.e., their negligence claim, which is a claim the nature and origin of which is an
obligation imposed by law. Because the plaintiffs acknowledged that their claim labeled breach
of contract was time-barred, the Michigan Millers panel had no occasion to consider and decide
the issues whether the nature and origin of that claim was a duty imposed by law or the breach of
an express promise and, if the breach of an express promise, whether such a claim is subject to §
5839(1). Our conclusion in this regard is bolstered by the following statement by the panel in the
Michigan Millers:
Because § 5839(1) refers to ”any action to recover damages for any injury
to property . . . or for bodily injury or wrongful death,” it is clear that even before
the addition of § 5805(10) it was not limited to tort actions, but, rather, included
contract actions. [Id. at 378 (emphasis in original).]
In other words, we agree with the Michigan Millers panel that § 5839(1) applies to
“any action” against an engineer or contract, whether premised on a tort theory or contract
theory. However, in addition, the “action” must be one seeking “to recover damages for
any injury to property . . . .” MCL 600.5839(1); MSA 27A.5839(1) (emphasis supplied).
The breach of an express promise is not a damage to property. Huhtala, supra at 128129. Thus, we conclude that Michigan Millers does not decide a rule of law, i.e., that §
5839(1) governs a claim whose nature and origin is the breach of an express promise, that
is binding on this panel by virtue of MCR 7.215(H). See also Witherspoon v Guilford,
203 Mich App 240, 246; 511 NW2d 720 (1994) (dicta). Accordingly, we will apply the
distinction enunciated in Huhtala to analyze the nature and origin of plaintiff’s breach of
contract claim in this case.
Plaintiff’s amended complaint alleges it entered into a contract with defendant Union in
which defendant Union agreed to construct Simpson Drive according to certain specifications.
The complaint further alleges that plaintiff entered into a contract with defendant Ringenberg
pursuant to which defendant Ringenberg agreed to perform “resident construction inspection
services” pertaining to the construction of Simpson Drive. Section five of the contract between
plaintiff and defendant Ringenberg indicates that the “resident construction inspector” would
perform, in part, the following duties:
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(1) Physically oversee the various parts of the work of the construction in
all phases to determine that the work performed is in accordance with the plans
and specifications.
***
(8) Report to the A/E [defendant Ringenberg] and the Owner any problems
which are delaying, or are anticipated to delay, the Work.
The complaint alleges that defendants breached their contracts because Simpson Drive
was not constructed in accordance with the contract specifications. The complaint further alleges
that defendant Ringenberg failed to advise plaintiff that Simpson Drive was not constructed
according to specification.
Plaintiff’s complaint does not allege any breaches of duties implied by law, such as the
breach of an implied warranty of fitness, Huhtala, supra at 129, n 11, or the breach of a duty of
reasonable care. Rather, plaintiff’s complaint, taken as a whole, indicates that plaintiff’s
damages flowed from defendants’ failure to construct or oversee the construction of Simpson
Drive as agreed to in their contracts. In other words, the nature and origin of plaintiff’s claim is
the breach of express promises and dependent on the existence of a contract and contract
principles. The breach of these promises is not a damage to property. Therefore, we conclude
that § 5839(1) does not apply to this case, and that the six-year period applicable to actions to
recover damages for breach of contract, § 5807(8), applies to this case.
Plaintiff’s breach of contract claim accrued no later than November 13, 1984, when
plaintiff accepted Simpson Drive. Accordingly, plaintiff’s breach of contract claim is timebarred by § 5807(8).11 However, the fraudulent concealment statute provides that a fraudulently
concealed claim may be commenced within two years after the plaintiff “discovers, or should
have discovered, the existence of the claim . . . although,” as in this case, “the action would
otherwise be barred by the period of limitations.” Finding the fraudulent concealment statute
inapplicable, the trial court did not address defendants’ motion pursuant to MCR 2.116(C)(10)
with respect to plaintiff’s fraudulent concealment argument. We conclude that summary
disposition is inappropriate without a consideration of this argument. Accordingly, we reverse
the trial court’s grant of summary disposition and remand for further proceedings consistent with
this opinion. We do not retain jurisdiction. No taxable costs pursuant to MCR 7.219, neither
party having prevailed in full.
Reversed and remanded.
/s/ Michael R. Smolenski
/s/ Thomas G. Power
1
As explained in Frankenmuth Mut Ins Co v Marlette Homes, Inc, 219 Mich App 165; 555
NW2d 510 (1996):
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A statute of repose limits the liability of a party by setting a fixed time
after the sale or first use of an item beyond which the party will not be held liable
for defects in it or injury or damage arising from it. Unlike a statute of
limitations, a statute of repose may bar a claim before an injury or damage occurs.
[Id. at 167, n 1.]
2
Plaintiff conceded below that the one-year discovery period is inapplicable to this case because
its claim was not founded on gross negligence.
3
This statute initially applied only to engineers and architects. Frankenmuth, supra at 171.
However, it was amended by 1985 PA 188 to include contractors. Id. As explained in O’Brien v
Hazelet & Erdal, 410 Mich 1; 299 NW2d 336 (1980), § 5839(1)
was enacted in 1967 in response to then recent developments in the law of torts.
The waning of the privity doctrine as a defense against suits by injured third
parties and other changes in the law increased the likelihood that persons taking
part in the design and construction of improvements to real property might be
forced to defend against claims arising out of alleged defects in such
improvements, perhaps many years after construction of the improvement was
completed. The Legislature chose to limit the liability of architects and engineers
in order to relieve them of the potential burden of defending claims brought long
after completion of the improvement and thereby limit the impact of recent
changes in the law upon the availability of cost of the services they provided. [Id.
at 14.]
In Smith v Quality Construction Co, 200 Mich App 297, 300-301; 503 NW2d 753 (1993),
this Court explained that the 5839(1) is
both one of limitation and one of repose. For ordinary negligence actions that
accrue within six years from the occupancy, use, or acceptance of the completed
improvement, the statute prescribes the time within which such actions may be
brought and, thus, acts as a period of limitation. When more than six years has
elapsed from the date of occupancy, use, or acceptance before an injury is
sustained, the statute is one of repose that prevents a cause of action from ever
accruing. . . . Where the injury occurs after the passage of the applicable time
period, the injured party “literally has no cause of action. The harm that has been
done is damnum absque injuria—a wrong for which the law affords no redress.”
[Id. at 300-301 (citations omitted).]
4
See note 3, supra.
5
See, generally, MCL 600.5807; MSA 27A.5807.
6
See, generally, MCL 600.5805; MSA 27A.5805.
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7
A breach of contract claim accrues on the date of the breach, not the date the breach is
discovered. Michigan Millers Mut Ins Co v West Detroit Building Co, Inc, 196 Mich App 367,
372; 494 NW2d 1 (1992).
8
See MCR 7.215(H).
9
Specifically, plaintiffs relied on Burrows v Bidigare/Bublys, Inc, 158 Mich App 175; 404
NW2d 650 (1987), City of Midland v Helger Construction Co, Inc, 157 Mich App 736; 403
NW2d 218 (1987), and City of Marysville v Pate, Hirn & Bougue, Inc, 154 Mich App 655; 397
NW2d 859 (1986). In Marysville, the plaintiff owner accepted in 1973 an improvement to real
property, the construction of which was designed and supervised by the defendant engineers
pursuant to their contract with the plaintiff owner. Id. at 657. A defect in the improvement was
discovered in 1981 by the plaintiff owner, who brought a malpractice action against the
defendant engineers in 1983. Id. This Court held that § 5839(1) did not apply to preclude the
plaintiff owner’s malpractice action. Id. at 660. In arriving at this holding, this Court reasoned
that the Legislature intended that § 5839(1) apply to claims by injured third parties, but not to
claims by owners for deficiencies in the improvement itself. Id. Midland and Burrows, the other
cases relied on by the plaintiffs in Michigan Millers, contain facts similar to Marysville and rely
on Marysville for a similar holding.
10
What is not clear from this opinion is whether the plaintiffs acknowledged that their breach of
contract claim was time-barred by § 5839(1) or § 5807(8).
11
See note 7, supra.
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